How to Pick a Credit Card for an International Vacation

You’ll want to avoid one particularly nasty fee and look for two great features

Taking a trip outside the United States requires preparation. Travelers need to get their passports in order, obtain any necessary entry visas and choose the right credit card. So what makes one credit card better than another when traveling internationally?

There are three key factors to consider:

Foreign Transaction Fees Buried in the fine print of most credit card user agreements is one of the most egregious fees, the foreign transaction fee. Many cards impose a charge of 1 to 3 percent on all purchases processed outside the United States, even though these transactions do not represent any additional costs to the card issuer.

Thankfully, new credit card applicants can determine if a card charges this fee. Look at the mandatory disclosures listed in promotional materials, commonly called the “Schumer Box” (named for Sen. Charles Schumer of New York, who sponsored the law when he was a congressman).

Better yet, more and more cards are dropping this charge. For example, Chase recently announced that it would no longer impose the foreign transaction fee on customers of its United Airlines Explorer card, as the bank has done for most of its other cards co-branded with airlines and hotels.

EMV Smart Chips Credit cards issued in most countries other than the United States include a small microchip that provides additional security beyond their magnetic strip. These are called EMV chips and they used to be necessary just for transactions at unattended kiosks, like ticket machines in train stations.

But on my most recent trip to London, I discovered that my cards without this chip were routinely rejected at restaurants, bookstores and museums.

Very quickly, this feature is becoming crucial for all credit card use in Europe and other parts of the world. Sadly, these chips are not being adopted by American banks as quickly as travelers would like.

Travel Assistance Services Many credit cards come with some sort of travel and emergency assistance services that can arrange reservations, offer medical and legal referrals and even help track down lost luggage.

While these services can be extremely valuable, cardholders are generally responsible for any additional costs incurred by third-party providers.

As a rewards card, customers receive one point in Hyatt’s Gold Passport program for each dollar spent; new applicants can earn two free nights at any Hyatt property worldwide. There is a $75 annual fee.

BankAmericard Travel Rewards This is one of the only cards available with an EMV chip, no foreign transaction fees and no annual fee. Cardholders earn 1.5 reward points per dollar spent; the points can be used for travel, gift cards, merchandise and other options.

In addition, cardholders also receive access to a 24-hour travel and emergency assistance program as well as a concierge that can help book travel and dining reservations.

PenFed Platinum Rewards Visa Signature Card There’s no foreign transaction fee and cardholders receive one point per dollar spent on most purchases, double points at supermarkets and triple points for gas. This card also offers a full slate of travel insurance and assistance services. There is no annual fee.

Jason Steele has worked as a computer systems administrator, a commercial pilot and a contributor to several of the top personal finance sites as an expert on credit cards and travel.